The Supreme Court has fixed September 22 to 24, 2026 for hearing before a seven-judge Bench the long-pending matter concerning the constitutional validity of a sales tax surcharge imposed under the Orissa Sales Tax Act, 1947. The Bench has proposed to hear the matter from 2 PM onwards on all three days, with the hearing expected to conclude by September 24.
The Bench of Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V Mohana discussed the need to ensure continuity in the hearing while also avoiding disruption to the Court’s regular miscellaneous and fresh matters. One proposal was to hear the matter for two hours every afternoon, while another was to devote entire days to the case on Tuesday, Wednesday and Thursday.
The Court ultimately favoured that the matter be taken up post-lunch from 2 PM onwards, beginning September 22 and continuing through September 24.
During the case-management hearing, the Court also focused on the preparation of the material required for the seven-judge Bench. Senior Advocate Dr. Anindita Pujari has been appointed as Nodal Officer. The parties have been given liberty to submit their first written submissions by September 15, 2026, while the relevant compilation of readings, documents and precedents is to be placed before the Bench. The Bench observed:
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“We propose that the matter be heard by the Bench of seven judges only post-lunch, from 2 PM onwards. The hearing will commence on 22nd September, 2026 and is expected to conclude by 24th September, 2026.”
Background of the Case
The dispute arose from a challenge to Section 5-A of the Orissa Sales Tax Act, 1947, which imposed a surcharge on the sales tax payable by dealers. The provision was challenged on the ground that the State Legislature lacked the competence to impose such an additional levy under the Constitution.
The two-Judge Bench referred the matter to a larger Bench after noting a potential conflict between Hoechst Pharmaceuticals Ltd. v. State of Bihar, (1983) 4 SCC 45 and the seven-Judge decision in India Cement Ltd. v. State of Tamil Nadu, (1990) 1 SCC 12.
Thereafter, on October 6, 1999, the Supreme Court noted that the Constitution Bench judgment in S. Kodar v. State of Kerala, AIR 1974 SC 2272 would also have to be considered and consequently held that a reference to a Bench of seven learned Judges becomes necessary.
The larger Bench is therefore required to examine the constitutional question concerning the State’s power to impose an additional levy/surcharge on sales tax, including the characterisation of the levy and the scope of the State’s legislative competence. The question to be considered is: whether State governments can constitutionally impose sales tax based on annual turnover.